Originally published March 1996
Although grousing about FDA remains prevalent in the medical device industry--I still get the occasional wild-eyed letter flogging MD&DI for featuring interviews with the "enemy" FDA--it's been refreshing this year to see that the industry is equally quick to acknowledge and reinforce improvements in FDA performance.
As indicated in this year's business climate survey, beginning on page 60, last year may well prove to have been an important turning point in the relationship of FDA and industry. Our evidence shows that the device industry is encountering fewer FDA delays in 510(k) reviews and that changes in FDA policies and procedures are improving prospects for many companies.
Discussing these results with medical device industry representatives last month at the MD&M West meeting in Anaheim, CA, I was interested to find that most shared the upbeat assessment of our survey respondents. Clearly the agency has some distance yet to go to meet the statutory benchmarks for product approvals, but the improvements to date have made an important difference.
To me, another striking finding of our survey is that industry is not only looking up, but looking to the East. As noted in this issue on page 65, the interest of device company executives in the markets of the Asian Pacific Rim has risen dramatically during the four years we've been conducting this survey.
In 1993, just 14% of the respondents cited Pacific Rim markets other than Japan as top growth markets for their companies. This percentage shot up to 24% last year, and 35% this year. Among executives at large medical device companies, the East Asian market outside Japan is cited as a top market more often than any other except the United States.
A representative view is expressed by Roger Stoll, president and CEO of Ohmeda, in MD&DI's Executive Roundtable, beginning on page 68. He notes that "there's tremendous growth taking place in those areas, and as economies grow there's a commensurate desire for expanded and more-sophisticated health-care capabilities." By comparison, he adds, the United States, Europe, and Japan are stable markets with only nominal growth. Accordingly, Ohmeda is putting an emphasis on expansion into Asia.
Now, if you're an executive at a small medical product company--the kind that dominates the U.S. device industry--you may be thinking, "Going to Asia is fine for the big boys, but how can I do it?" I had a chance to discuss this question with Ames Gross, a frequent contributor to MD&DI and the president of Pacific Bridge (Washington, DC), a firm that helps U.S. businesses break into Asian markets.
Ames recommends that small companies start by building up a distributor network in such East Asian markets as Hong Kong, Singapore, Malaysia, Thailand, and Indonesia. This process, he says, can be completed in about a year for a cost of $50,000 to $100,000. Because companies will need to see some return on their investment relatively soon, he suggests not going to Japan until business develops in smaller markets.
Building up business in Asia requires a lot of attention, he adds, but the payoff in the long run will be worth the effort. Indeed, according to Ames, the time to enter the Asian market is now, when the competition is still relatively sparse. Wait too long, he says, and your competition may end up using Asia as a base for beating you in the U.S. market.